Part exchange may be a viable option for a quick sale.
Part exchange is a relatively new concept, developed and currently practiced in the United Kingdom, that has only been around for roughly the last 30 years. It is an uncommon practice, as few homeowners are aware of its existence, yet very effective if you are in a time crunch to sell your current residence. The main principle surrounding a part exchange deal is that you agree to essentially trade your home to a part exchange firm or developer for less than market value in exchange for a new home.
Instructions
1. Select a reputable firm that will make your needs, wants and interests a priority. There are two ways to approach this. The first is to work with a PX firm that is in alliance with a reputable home builder. This will ensure the PX of a new construction home and the builder is often a strong indicator of the PX firm's reliability. The second option is to choose a national corporation that you feel comfortable with and is willing to answer and address your concerns without pressure. Also, when choosing the right firm to satisfy your needs, keep in mind that no reputable firm will ask for an upfront fee.
2. Review the firm's terms and conditions to make sure they are agreeable. Many firms have small print written into the contract that you should be aware of. Some of these stipulations may include points such that the current home must be in good condition, the value of your current home cannot exceed 70 percent of the value of the new property, property exclusions and location preferences.
3. Expect to receive an offer no greater than 85 percent of the home's fair market value. This is a rule of thumb; however, when the real estate market is particularly favorable, some firms will offer up to 90 percent of the home's fair market value. The rationale for the below-market offer is that the firm is absorbing some of the risk involved with the purchase of your home. There is a possibility that when it returns the home to the marketplace, it may not recover its full investment.
4. Enlist the professional help of at least three appraisers to evaluate the home. Speak with the firm as some of them may prefer to use their own professionals or may request you to complete this obligation. When making the offer, the firm may use one of the evaluations or an average of all three to come to a decision. Regardless of the price, any reputable PX firm should provide you with a rationale for its decision.
5. Check your former property to verify its purchase price. In the event that the firm was able to sell the home for more than anticipated, it may be willing to split that additional profit with you.
